Following the latest quarterly release of its worldwide, country-level forecasts Canalys predicts that next year tablets will almost out ship all other PC form factors combined, forming almost 50% of the total client PC market (desktops, notebooks, and tablets). The worldwide client PC market grew 18% in Q3 2013, despite desktop and notebook shipments continuing to decline. Tablet PC shipments accounted for 40% of PC shipments in Q3 2013, less than half a million units behind global notebook shipments. Tablet domination is set to continue, with Canalys forecasting 285 million units to ship in 2014, growing to 396 million units in 2017. Apple and Samsung are expected keep ahead of their competitors in the medium term, but there could be challenges for both vendors as competition in the tablet market continues to heat up.

Apple has maintained its top vendor position throughout 2013, and the launch of the iPad Air and new iPad mini will strengthen that position in Q4. Its desktop and notebook business has remained stable while other vendors have seen their shipments deteriorate. Apple’s prioritization of protecting gross margins will see its PC market share continue to decline. “Apple’s decline in PC market share is unavoidable when considering its business model. Samsung narrowly took the lead in EMEA this quarter and Apple will lose its position to competitors in more markets in the future,” said Canalys Senior Analyst Tim Coulling. “However, Apple is one of the few companies making money from the tablet boom. Premium products attract high value consumers; for Apple, remaining highly profitable and driving revenue from its entire ecosystem is of greater importance than market share statistics.”

MacDailyNews Take: Repetition of that last sentence — without the “tablets” specifier, since it applies to smartphones and traditional personal computers as well — is in order due to its welcome correctness (and because it sounds just like what we’ve been saying for years):

Apple is one of the few companies making money… Premium products attract high value consumers; for Apple, remaining highly profitable and driving revenue from its entire ecosystem is of greater importance than market share statistics.

Canalys forecasts that Microsoft will take 5% of the tablet PC market in 2014, up from just 2% in 2012. “2014 will see another major shift for the company as the Nokia acquisition brings it a step closer to being a fully-fledged smart mobile device vendor. As a vendor Microsoft needs to prove to channel partners and consumers that it is in this market for the long haul. Balancing the coopetition with its vendor partners and embracing a “challenger” rather than an “incumbent” mentality is essential. “To improve its position it must drive app development and better utilize other relevant parts of its business to round out its mobile device ecosystem,” said Canalys Research Analyst Pin Chen Tang. “A critical first step is to address the coexistence of Windows Phone and Windows RT. Having three different operating systems to address the smart device landscape is confusing to both developers and consumers alike.”

Android-derived operating systems will be responsible for driving growth in the market and are forecast to take 65% share in 2014 with 185 million units. Samsung continues to lead with strong year-on-year growth coming from its broad tablet portfolio, and in Q3 2013 it had a 27% share of Android tablet shipments. But with hundreds of small-to-micro brand vendors in established and high-growth markets and international players such as Acer, Asus, Lenovo, and HP, this market share statistic will also start to decline. “With the cost and time-to-market advantages afforded by their Chinese supply chain, these small-to-micro brand vendors are eating up tablet market share. Vendors such as Nextbook in the United States, and Onda and Teclast in the People’s Republic of China ship more units than some of the major international top tier vendors in their home countries. The rise of small-to-micro brand vendors has proved that there is a demand in for entry-level Android tablets in every country and in every region,” commented Shanghai-based Analyst James Wang. “Vendors such as Acer, Asus, HP, and Lenovo have all entered the price war, with entry-level products at sub-U$150 price points. With vastly different cost structures these vendors will continue to find it extremely challenging to keep pace with local competitors, especially in APAC and Latin America.” The tablet market has already started to see casualties, with BlackBerry exiting the market, and Barnes and Noble looking to adjust its business model away from its own independent hardware. Expect 2014 to bring a flurry of acquisitions, mergers, and failures as PC hardware vendors of all sizes struggle to maintain their desktop and notebook business while attempting to capitalize on a tablet market that will see great volumes driving limited value.

PCs including tablets, Worldwide, unit forecasts by category, 2014Note: Canalys defines a client PC as a computing device designed to be operated by an individual and positioned to serve a broad range of purposes, achieved by running third-party applications, some of which can work independently of a network connection. When designed to be portable, it must be able to function without mains power and have a built-in diagonal display size of at least 7 inches.

Source: Canalys

[Thanks to MacDailyNews Readers “Fred Mertz” and “Ron” for the heads up.]

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12 Comments

Someone please explain how these two consecutive sentences do not contradict each other:

“[Apple’s] desktop and notebook business has remained stable while other vendors have seen their shipments deteriorate. Apple’s prioritization of protecting gross margins will see its PC market share continue to decline.”

““[Apple’s] desktop and notebook business has remained stable [in Q3] while other vendors have seen their shipments deteriorate. Apple’s prioritization of protecting gross margins will see its PC market share continue to decline.””

The point being that in the just finished quarter, sales were stable, but that they predict the longer term trend is for a decline, given Apple’s priority, that they spell out a few sentences later.

I still say that even though current tablets are “Personal Computers” people are not buying tablets in place of computers (though many could).

If I was looking to upgrade my MacBook Pro right now, I would not buy an iPad instead. They still represent two types of work. I could do a significant portion of my work on my iPad, but for most of my work, the multitasking power of a conventional desktop or laptop is preferable. I just don’t buy one every freaking year! Why is it analysts can’t figure that out?

Computers are so powerful now, people keep them for 4 to 7 years easy. Tablets are still a growing market. Most people don’t have one, so you’re going to see growth there. At some point they’re going to saturate and I figure most people will sit on their tablets for 2 to 4 years.

Looking down from 30,000 feet, it is hard to imagine the whole personal landscape landslide of the last 4 years.

Apple has almost singlehandedly spearheaded about half the mode of personal tasks and communications away from the desktop and laptop work.

Looked at it in that way it is astounding how quick it has occurred. On another level, though, it is a testament to just how much time (actually decades) & technology it took for all that led up to what Apple did.

Apple has given people the ability to do more with less time and for that I am forever grateful.

The thing about the small cheep “white box” tablets are they don’t. I have known two people who bought them. They lasted less than 6 months. One said next time he will get an iPad. He got an iPhone instead, he needed a new phone, but will get an iPad soon. The other does not see the need for one, however her daughter has my old iPhone and loves it. The crap ones can have two effects. One is to push people into better brand name tablets. If they blame Android then Apple has a win. The other is to turn people off to tablets completely. The low end early adapters will have the affect of telling their friends not to buy the cheep crap.